The Karnataka High Court held that marketing and technical support services provided by the taxpayer to its foreign parent are entitled to be treated as an export of services under the IGST Act (Integrated Goods and Services Tax) and do not constitute intermediary services.
Justice S.R. Krishna Kumar said that the place of supply of these services is outside India, fulfilling all conditions for export of services, and the taxpayer is eligible for a refund of IGST paid.
The taxpayer has given marketing support services and technical support services to its foreign parent company under a Master Service Agreement dated 01.04.2014. These services are regarded by the assessee as an export of services under section 2(6) of the IGST Act, and a refund was claimed for the period from April 2021 to March 2022.
The department had rejected the refund claimed via an order on the foundation that such services are intermediary services u/s 2(13) of the IGST Act. The taxpayer said that it is not an intermediary service provider and therefore the given services via the taxpayer are directed to the export of services, the taxpayer does not owe to pay IGST as demanded by the department.
The taxpayer’s counsel said that in the case of the taxpayer regarding pre-GST / service tax regime, the CESTAT, Bengaluru, has concluded that the taxpayer was not an intermediary in relation to pre-GST tax period and the said order dated 28.03.2022 has attained finality and became conclusive and binding upon the department particularly when there is no revision in the activity of the taxpayer in pre-GST and post-GST period.
The bench, after analysing the Master Service Agreement dated 01.04.2014 entered into by the taxpayer with its foreign parent company in Singapore and other documents, stated that the taxpayer is not an intermediary and the service supplied by the taxpayer amounts to the export of services.
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The bench for the above has permitted the petition and asked the department to refund in favour of the taxpayer.
| Case Title | M/s Excelpoint Systems (India) Pvt. Ltd. vs. Joint Commissioner of Central Tax |
| Case No. | No. 25598 OF 2024 |
| For the Petitioner | Ravi Raghavan and Samruddhi Shetty |
| For the Respondent | Jeevan J. Neeralgi |
| Karnataka High Court | Read Order |
